Methods For Appraising The Bidding Price Of International Petrochemical Projects Based On Monte-Carlo Simulation

In recent years the bidding price of international petrochemical contracting projects was affected heavily by the unsteady global political and economic environments, such as high complexity, long duration and financing needed in projects, exchange rate floating, inflation in economy plus political risks, which making cost estimate filled with the traits of uncertainty and variability. It’s not easy for experts to appraise them in one reasonable and scientific way in considering above-mentioned traits, consequently one method integrating Monte Carlo simulation and expert’s judgments were put forward. Appraisal index was brought out firstly and then First Order and Second Order Monte Carlo simulation methods were introduced including PDF of cost items and their correlated coefficients determination. Finally the process for analyzing the cost estimate was established.One case by the new method was analyzed and validates its effectiveness.